The Sixth Circuit Clarifies Admissibility of the CPSC’s Failure to Take Regulatory Action

The admissibility of the Consumer Product Safety Commission’s (CPSC) failure to take action to regulate products has been litigated in many courts throughout the United States, largely due to an ambiguous provision in the Consumer Product Safety Act. The Sixth Circuit Court of Appeals has recently provided important guidance on this evidentiary issue in Cummins v. BIC USA, Inc., 727 F.3d 506 (2013). In Cummins, the Sixth Circuit clarified an important distinction between CPSC activity that leads to a decision not to regulate, which is admissible, and situations where the CPSC completely fails to act, which is inadmissible. Thus, if the CPSC investigates a product and ultimately decides not to promulgate a regulation related to that product, such activity is generally admissible in a subsequent product liability lawsuit involving the product. In contrast, if the CPSC performs no investigation into the product at all, its lack of activity will generally not be admissible in a subsequent product liability lawsuit.

Confusion on the admissibility of CPSC’s failure to take regulatory action is likely derivative of an ambiguous provision in the Consumer Product Safety Act. More specifically, 15 U.S.C. § 2074(b) provides as follows:

"The failure of the [Consumer Product Safety] Commission to take any action or commence a proceeding with respect to the safety of a consumer product shall not be admissible in evidence in litigation at common law or under state statutory law relating to such consumer product."

Section 2074(b) of the Consumer Product Safety Act was first addressed in Johnston v. Deere & Co., 967 F. Supp. 578, 579 (D.ME. 1997), where the U.S. District Court for the District of Maine considered the admissibility of the CPSC’s action in gathering information regarding the dangers of riding lawn tractors and the potential benefits of “no mow in reverse devices,” issuing a proposed rulemaking, and then later withdrawing the proposed rulemaking. The plaintiffs in Johnston wanted to introduce evidence that the CPSC gathered information on “no mow in reverse devices” and issued a proposed rulemaking, but exclude evidence of the CPSC withdrawing the proposed rulemaking. The Johnston court ruled that, “[t]he most reasonable reading of section 2074(b) . . . is that it is referring to the complete failure by the CPSC to engage in activity on a product; that failure is not to be introduced into evidence as somehow implying that a particular product is not unsafe.” On the other hand, “[w]here the CPSC has engaged in activity . . . those activities are admissible even if they lead ultimately to a decision not to regulate.”

Section 2074(b) of the Consumer Product Safety Act was subsequently interpreted by the Sixth Circuit in Morales v. American Honda Motor Co., 151 F.3d 500, 512 (6th Cir. 1998). In Morales, the defendants challenged the district court’s refusal to admit a report from the CPSC that denied a petition to regulate unlicensed two-wheeled motorized vehicles. The Morales court concluded that “[t]he report in question was not evidence of the CPSC’s inaction; rather, it was evidence of the CPSC’s action in denying the rule-making petition.” As such, the Morales court determined that the CPSC’s report should have been admitted.

More recently, in Cummins, supra, the Sixth Circuit addressed the admissibility of the CPSC’s failure to take regulatory action regarding a cigarette lighter that allegedly failed to comply with a federal consumer product safety requirement. The trial court permitted the defendant to introduce testimony from a former CPSC employee that the agency had never investigated, expressed concern about, or taken any enforcement action regarding the allegedly defective cigarette lighter. The plaintiffs appealed this ruling, asserting that the trial court’s ruling on the testimony of the former CPSC employee violated 15 U.S.C. § 2074(b).

The Sixth Circuit affirmed the trial court’s ruling, concluding that the testimony introduced by the defendant “cannot be fairly characterized as a complete failure by the CPSC to engage in any activity on the safety of the product.” The Sixth Circuit reasoned that, although the testimony of the former CPSC employee “does not amount to a report or statement of reasons for deciding not to regulate, it is fairly characterized as evidence of ‘CPSC activity that led to a decision not to regulate.’” Accordingly, the Sixth Circuit concluded that the trial court did not err in allowing the former CPSC employee to testify regarding the CPSC’s activity in relation to the lighter, including its failure to take any enforcement action with respect to the alleged violation of a federal consumer product safety requirement.

In sum, courts interpreting 15 U.S.C. § 2074(b) have consistently declined to read it literally. To the contrary, courts have increasingly acted with leniency in admitting evidence of any CPSC activity that ultimately leads to a decision not to regulate. As such, attorneys should not be afraid of 15 U.S.C. § 2074(b) when seeking to introduce testimony or other evidence, as long as they are seeking to introduce evidence of CPSC activity that ultimately leads to a decision not to regulate, as opposed to instances where the CPSC fails to take any action at all to examine or investigate the product.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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